Summary
Realty Income Corporation (O) has filed an 8-K report detailing a material definitive agreement to acquire Spirit Realty Capital, Inc. (SRC) through a merger. The transaction is structured as Spirit Realty merging with a wholly-owned subsidiary of Realty Income, with Spirit's common stock being converted into Realty Income common stock at an exchange ratio of 0.762 shares, plus cash in lieu of fractional shares. Spirit's preferred stock will also be converted into equivalent Realty Income preferred stock. The merger is subject to customary closing conditions, including Spirit stockholder approval, regulatory filings, and listing approvals for Realty Income's shares on the NYSE. The deal is anticipated to close in the first quarter of 2024.
Key Highlights
- 1Realty Income Corporation (O) enters into a definitive agreement to acquire Spirit Realty Capital, Inc. (SRC) via a merger.
- 2The transaction is an all-stock deal where Spirit shareholders will receive 0.762 shares of Realty Income common stock for each share of Spirit common stock held.
- 3Spirit's preferred stock will be converted into comparable Realty Income preferred stock.
- 4The merger is subject to approval by Spirit's stockholders and other customary closing conditions.
- 5The target closing date for the merger is the first quarter of 2024.
- 6Spirit has customary non-solicitation provisions, with termination fees payable under certain circumstances.
- 7Realty Income may elect an alternative merger structure where Spirit merges directly into Realty Income.
Frequently Asked Questions
This 8-K filing announces the execution of a Material Definitive Agreement, specifically an Agreement and Plan of Merger, between Realty Income Corporation and Spirit Realty Capital, Inc. to merge the two companies.
Spirit Realty Capital, Inc. common stock will be converted into Realty Income Corporation common stock at an exchange ratio of 0.762 shares of Realty Income common stock for each share of Spirit common stock. Cash will be paid for fractional shares.
The merger is expected to close during the first quarter of 2024.
Yes, key conditions include approval by Spirit's stockholders, effectiveness of Realty Income's Form S-4 registration statement, listing approval for Realty Income's shares on the NYSE, and no prohibitive injunctions or laws. Both parties must also meet certain accuracy and covenant compliance standards, and there must not have been a material adverse effect on either company.
The merger agreement outlines specific termination rights for both Realty Income and Spirit. If Spirit terminates the agreement to accept a superior proposal under certain conditions, a termination fee of approximately $173.97 million (or a reduced amount of $93.68 million under specific circumstances) may be payable to Realty Income. An expense reimbursement of $25.0 million may also be due if Spirit's stockholders fail to approve the merger.